Samsung Said to Supply Memory Chips for Next-Generation iPhone

[MacRumors]

Samsung Electronics has inked a deal with both Apple and LG to supply advanced DRAM memory chips in next-generation iPhones and the LG G4 respectively, according to sources "familiar with the deal" for The Korea Times.

The deal, rumored to be worth billions of dollars, would see Samsung produce at least half of the memory chips that Apple would need for its next-generation iPhone lineup. The report claims that Apple could ask Samsung to ramp up manufacturing of the chips if needed, with the alleged contract lasting at least a year.

"Under the agreement, Samsung will start providing LG Electronics with 100 percent mobile DRAM chips it needs for LG G4 smartphone, which will be unveiled in April. Also, Samsung will handle at least half of the amount that Apple needs for its new iPhone - tentatively named iPhone 6S," an industry official who is familiar with the deal told The Korea Times.

The agreement was reached just a few months after Samsung began mass production of new 20-nanometer 8-Gigabit LPDDR4 memory chips, which are said to offer more than double the density and performance compared to its 4-Gigabit LPDDR3 predecessor. The sources say that on the LG side of things, Samsung will be providing 100 percent of the chips for the company's flagship G4 smartphone, set to be unveiled in the Spring.

Though Apple and Samsung have partnered in the past for manufacturing purposes, the two companies have been fierce rivals for several years. The two companies have dropped litigation against each other outside of the United States in recent months, however, and this agreement further suggests that the tech giants have an improved working relationship as of late.

While not expected to launch until September, news and rumors about the so-called "iPhone 6s" have begun circulating recently, with Samsung reportedly responsible for the majority of A9 chip production based on its 14nm process. Conflicting reports suggest that TSMC may supply Apple with the remaining chip orders.

Article Link: Samsung Said to Supply Memory Chips for Next-Generation iPhone

 

[NIKKG]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

 

[Keniutek]

But, but... Samsung is evil.

 

[maflynn]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

Because no other fabricator can produce the quantities apple needs at the costs they expect.

 

[Nungster]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

So what you're essentially saying is that Apple should buy Samsung's chip division.

I am not in the semiconductor business, but I will bet that there is a lot of time and risk involved in starting a chip line.

 

[gnasher729]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

It's called acting responsibly with the money that Apple worked hard for.

More than entering the auto manufacturing industry?

There is risk, and there is reward. What would be the reward from building a memory chip factory when Apple can easily buy the chips, other than pleasing the fanboys?

 

[Jsameds]

Apple: We'd like some 2GB chips for our new iPhones please.

Samsung: Sorry, we can only do 512Mb and 1GB at the moment.

Apple: Ok that'll have to do.....

 

[SteveJobs2.0]

So what you're essentially saying is that Apple should buy Samsung's chip division.

I am not in the semiconductor business, but I will bet that there is a lot of time and risk involved in starting a chip line.

More than entering the auto manufacturing industry?

 

[bozzykid]

Apple: We'd like some 128 and 256GB chips for our new iPhones please.

Samsung: Sorry, we can only do 8 and 16GB at the moment.

Apple: Ok that'll have to do.....

Uh, these chips Samsung is supplying is not for permanent storage.

 

[iapplelove]

Samsung is a fantastic smart phone chip manufacture. I don't mind Samsung parts of it means the best iphone built.

 

[Jsameds]

Uh, these chips Samsung is supplying is not for permanent storage.

My bad.

Now edited, haha

 

[Tco99]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

Do you have chickens in the garden to supply your eggs?

 

[bozzykid]

More than entering the auto manufacturing industry?

I don't see Apple mass producing cars anytime soon. And producing chips for iPhones is on a whole different scale when compared to cars. They sold over 70 million iPhones in 3 months alone. There are only a few companies in the world with experience to help produce chips at that scale. And none of them can do it alone.

 

[samcraig]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

The fact that you imply Apple is being a cheapskate for not making their own memory chips illustrates that you know very little about business 101.

 

[69Mustang]

I don't get why Apple relies on others to keep them going when they got all this money sitting in the bank that they can use to build their own manufacturing plants. Talk about being a cheapskate.

Spend billions on construction. Spend billions on equipment. Spend 10's of millions on personnel. Spend 100's of millions on raw material and actual production. Spend billions on R&D and retooling fab for next gen's production (rinse & repeat). This would be for one component such as memory chips. I think you'd need different equipment for each of those components in this imaginary fab. Might even need totally different fab. As far as I know, there is no one-stop-shop fab for all your components.

I'm sure I am missing a boatload of other expensive components of starting/running a fab. I have no experience or true knowledge in this area at all. Even with my lack of knowledge in this area, I can see there is no advantage to Apple starting a fab facility.

or

Cheaply source JIT components from fabricators that bear all those costs to receive relatively skinny margins. From the little I do know, fabs turn their small profit on volume.

The only silver lining I see in the cloud of Apple starting/acquiring a fab is some fanboys would get giggly over the prospect of Apple not relying on Samsung. Outside of those fanboys, nobody would benefit; especially Apple.

 

[CEmajr]

Excellent. I'm sure Samsung needs the money from this contract these days.

 

[hot spare]

I don't see Apple mass producing cars anytime soon. And producing chips for iPhones is on a whole different scale when compared to cars. They sold over 70 million iPhones in 3 months alone. There are only a few companies in the world with experience to help produce chips at that scale. And none of them can do it alone.

Both Samsung and Hynix produce more than what is required for Apple.

 

[LordQ]

But guys, the 10th anniversary iPhone is coming in 2016 with iOS 10 and the A10 Chip.

 

[wilky76]

It's not a bad thing having Samsung memory in your iPhone, they make some of the best memory around.

The iPhone 6S will probably be around 90% Samsung components.

 

[sparky08]

Good to see that Apple is starting to catch up with Samsung in some respects.

 

[RamGuy]

It's not a bad thing having Samsung memory in your iPhone, they make some of the best memory around.

The iPhone 6S will probably be around 90% Samsung components.

You Sir, should learn the difference between being a manufacturer and actually being the one behind the components.

The iPhone is not remotely close to housing 90% Samsung components, other than the RAM chips and NAND chips there is barley any Samsung components to speak of at all.

They do manufacture the SoC (CPU+GPU) but it's a custom ARM design by Apple and has nothing to do with Samsung. Most of Apples displays are based of Sharp technology but is being manufactured by LG and Samsung etc..


LTE / GSM radios are from Qualcomm, batteries are from various suppliers, DAC + headphone amps are not from Samsung etc.. There are a whole lot from various companies that are not Samsung and wont be Samsung any time soon.

 

[CraigB1960]

They sold over 70 million iPhones in 3 months alone. There are only a few companies in the world with experience to help produce chips at that scale. And none of them can do it alone.

Exactly! Same reason they don't produce the boards, capacitors, resistors, rest of the semiconductors, display, case, glass, sensors, camera, and assemble the finished product.

Apple does not need to be distracted from their design and software development.

 

[Thunderhawks]

Tentatively named 6S , LOL.

 

[macduke]

More than entering the auto manufacturing industry?

Yes, because you can't just go to Ford (or wherever) and say "Build us a car. Here are the specs." Also there won't be any Apple Car for at least five years, and they will probably start out expensive with a small production run like Tesla. But Apple needs hundreds of millions of chips today. Also they tried setting up their own manufacturing with sapphire and look at how well that turned out!

I think Apple will do their own manufacturing when they can bring it back home to the US. China is expanding rapidly and soon it won't be as cheap to do business there. Although—again—the sapphire thing was in Arizona and failed spectacularly. Maybe it was just a one-off fluke, maybe not. I hope not.

 

[dankedieter]

Samsung is a fantastic smart phone chip manufacture. I don't mind Samsung parts of it means the best iphone built.

Agreed, they're great as far as internals go. Don't mind they're parts in my computer/phone at all as long as it has nothing to do with the OS or design.